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Clean Claims and Other Information for Health Providers

Because the Department of Insurance and Financial Services (DIFS) regulates the business of insurance transacted in Michigan, our authority pertains to contracts issued in Michigan. DIFS generally only accepts complaints from parties involved in the contract, such as the insured, policyholder or certificate holder. Because a health care provider is usually not a party to the health care contract, we generally do not accept complaints from providers. There are some exceptions to this policy, however.

DIFS will pursue appropriate complaints from participating providers of Blue Cross Blue Shield of Michigan (BCBSM), HMOs, Alternative Finance and Delivery Systems and Delta Dental Plan of Michigan when the complaints involve these entities and there are participation agreements. DIFS will also pursue complaints from providers acting as the authorized representative of a patient covered by a Michigan licensed health carrier; however, written authorization from the patient or their legal representative must be included with the complaint. 

Complaints involving out-of-state health care plans should, in most cases, be pursued by the patient with the insurance regulatory agency of the state where the health care plan was issued or delivered.

Additional DIFS regulatory assistance to providers is explained below.

CLEAN CLAIMS

Providers occasionally have problems with receiving timely payment for submitted claims without any errors or other issues, often referred to as “clean claims”. Public Act 316 of 2002 was enacted to afford provisions in handling untimely clean claim payments.

DEFINITION OF CLEAN CLAIM:

A "clean claim" means a claim that does all of the following:
(i) Identifies the health professional, health facility, home health care provider, or durable medical equipment provider that provided service sufficiently to verify, if necessary, affiliation status and includes any identifying numbers.
(ii) Sufficiently identifies the patient and health plan subscriber.
(iii) Lists the date and place of service.
(iv) Is a claim for covered services for an eligible individual.
(v) If necessary, substantiates the medical necessity and appropriateness of the service provided.
(vi) If prior authorization is required for certain patient services, contains information sufficient to establish that prior authorization was obtained.
(vii) Identifies the service rendered using a generally accepted system of procedure or service coding.
(viii) Includes additional documentation based upon services rendered as reasonably required by the health plan.
MCL 500.2006, MCL 400.111i for Medicaid clean claims, and MCL 550.1211a for BCBSM.

SUBMITTING A CLAIM TO A HEALTH PLAN:
A health professional, health facility, home health care provider, or durable medical equipment provider shall bill a health plan within 1 year after the date of service or the date of discharge from the health facility in order for a claim to be a clean claim.

The initial submission of the claims and all other notices required may be made in writing or electronically.

CLEAN CLAIM PAYMENT:
A clean claim must be paid within 45 days after receipt of the claim by the "health plan."  The 45-day time period is tolled from the date of receipt of a notice to a health professional, health facility, home health care provider, or durable medical equipment provider to the date of the health plan's receipt of a response from the health professional, health facility, home health care provider, or durable medical equipment provider.

If a health plan determines that 1 or more services listed on a claim are payable, the health plan shall pay for those services and shall not deny the entire claim because 1 or more other services listed on the claim are defective.
A health plan must notify the health professional, health facility, home health care provider, or durable medical equipment provider within 30 days after receipt of the claim by the health plan of all known reasons that prevent the claim from being a clean claim.

A health professional, health facility, home health care provider, and durable medical equipment provider have 45 days, and any additional time the health plan permits, after receipt of a notice to correct all known defects.

If a health professional's, health facility's, home health care provider’s, or durable medical equipment provider's response makes the claim a clean claim, the health plan shall pay the health professional, health facility, home health care provider, or durable medical equipment provider within the 45-day time period, excluding any time period tolled.

If a health professional's, health facility's, home health care provider's, or durable medical equipment provider's response does not make the claim a clean claim, the health plan shall notify the health professional, health facility, home health care provider, or durable medical equipment provider of an adverse claim determination and of the reasons for the adverse claim determination within the 45-day time period.

A health professional, health facility, home health care provider, or durable medical equipment provider shall not resubmit the same claim to the health plan unless the 45 day time frame has passed.

PENALTIES FOR LATE PAYMENT OF A CLEAN CLAIM:
A clean claim that is not paid within 45 days shall bear simple interest at a rate of 12% per annum. The Director of DIFS may also impose a civil fine of not more than $1,000.00 for each violation not to exceed $10,000.00 in the aggregate for multiple violations.

BCBSM is subject only to the civil penalties listed above and penalties listed in Section 402 of the Nonprofit Health Care Corporation Reform Act.

FILING A CLEAN CLAIM COMPLAINT WITH THE DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES:
A health professional, health facility, home health care provider, durable medical equipment provider, or health plan alleging that a timely processing or payment procedure has been violated may file a complaint with DIFS on Form FIS 0284 and has a right to a determination of the matter by the Director or his or her designee.

A health professional, health facility, home health care provider, durable medical equipment provider, or health plan may also seek court action.

A health facility, a health professional, a home health care provider, and a durable medical equipment provider can file a clean claim complaint. Individuals or policyholders cannot file a clean claim complaint.

A health plan shall not terminate the affiliation status or the participation of a health professional, health facility, home health care provider, or durable medical equipment provider with a health maintenance organization provider panel or otherwise discriminate against a health professional, health facility, home health care provider, or durable medical equipment provider because the health professional, health facility, home health care provider, or durable medical equipment provider claims that a health plan has violated Section 2006(7) to (10) of the Insurance Code.

EXCLUDED CLAIMS:
The provisions of Section 2006 of the Insurance Code do not apply to claims arising from pharmacies, claims arising out of Sections 3101 to 3177 of the Insurance Code (No Fault Auto claims), an entity regulated under the Worker's Disability Compensation Act of 1969, 1969 PA 317, MCL 418.101 to 418.941, the processing and paying of Medicaid claims that are covered under Section 111i of the Social Welfare Act, 1939 PA 280, MCL 400.111i, claims from Medicare or Medicare Advantage plans, and claims from self-funded health care plans.

MEDICAID HMO CLEAN CLAIMS:
Under MCL 400.111i, Medicaid providers may file clean claims with the Director against Medicaid HMOs for timely payment for the claims that have been submitted electronically.  Ordinarily a clean claim must be paid within 45 days after receipt of the claim by the qualified health plan. A "clean claim" must meet certain criteria set forth in the legislation and must be submitted on form FIS 278 which can be accessed through the website for the DIFS.

OTHER DEFINITIONS RELEVANT TO CLEAN CLAIMS:


HEALTH FACILITY:

Health facility means a health facility or agency licensed under Article 17 of the Public Health Code, 1978 PA 368, MCL 333.20101 to 333.22260.

HEALTH PROFESSIONAL:

Health professional means a health professional licensed or registered under Article 15 of the Public Health Code, 1978 PA 368, MCL 333.16101 to 333.18838.

HEALTH PLAN:
Health plan means all of the following:
(i) An insurer providing benefits under an expense-incurred hospital, medical, surgical, vision, or dental policy or certificate, including any policy or certificate that provides coverage for specific diseases or accidents only, or any hospital indemnity, Medicare supplement, long-term care, or 1-time limited duration policy or certificate, but not to payments made to an administrative services only or cost-plus arrangement.
(ii) A MEWA regulated under Chapter 70 that provides hospital, medical, surgical, vision, dental, and sick care benefits.
(iii) A health maintenance organization or alternative financing delivery system licensed or issued a certificate of authority in this state.
(iv) A health care corporation for benefits provided under a certificate issued under the Nonprofit Health Care Corporation Reform Act, Public Act 350 of 1980, MCL 550.1101 to 550.1704, but not to payments made pursuant to an administrative services only or cost-plus arrangement.

BCBSM PROVIDER ISSUES


BCBSM PROVIDER APPEALS AND PART 4 REVIEW AND DETERMINATIONS:

BCBSM participating providers having problems with BCBSM should refer to their contract with BCBSM and follow the appeal options mentioned in the contract. If the problem cannot be resolved and does not involve contractual issues, DIFS may be able to provide assistance. Public Act 350 of 1980, the law that governs BCBSM, requires there be an established appeals process for BCBSM participating providers who have a dispute with BCBSM over individual claims or audit determinations. See MCL 550.1402.

Provider Inquiry:
Before a BCBSM participating provider begins the appeal process for individual claims disputes, the provider should call BCBSM’s Provider Inquiry line and make a status inquiry or send a written inquiry to BCBSM. 

Written inquiries regarding individual claims disputes should be sent to BCBSM at:
Physician’s Ombudsman Unit - MC 2027
Blue Cross Blue Shield of Michigan
600 E. Lafayette Boulevard
Detroit, MI  48226-2998

If the provider disagrees with BCBSM’s response, the provider may then appeal BCBSM’s findings. The appeals process usually starts 30 days after BCBSM’s written response or audit determination is received.
After BCBSM’s appeal process is completed and, if the provider still disagrees with BCBSM’s proposed resolution, other avenues of appeal, such as arbitration, filing an appeal with the DIFS or taking the matter to court are available. 
Note the formal appeal process listed below applies to most non-facility based providers.  The appeal process for facility based providers (e.g. hospitals, outpatient physical therapy facilities, pharmacies, etc.) may be a little different than what is described here.  Please be certain to review the appeal process in either BCBSM’s participating provider agreement or its provider manual for complete details on the appeal process that applies to your particular provider type.  BCBSM’s provider manuals are available in the provider portal on BCBSM’s web-DENIS at www.bcbsm.com.  Select your provider type and the keyword “appeals” to find the proper appeal process.  BCBSM also provides detailed appeal instructions in its audit findings letters sent to providers and at each stage of the appeal process.

Step 1 - Provider Written Complaints:
Providers may send BCBSM a written complaint within 30 days of completing BCBSM’s routine inquiry procedures or receiving a BCBSM audit determination.  Within 30 days from receipt of the complaint, BCBSM will address each point of the complaint and the reasons for its decision in a letter. 

Written complaints for provider individual claim disputes should be mailed to:
Conference Coordination Unit - Mail Code 2027
Blue Cross Blue Shield of Michigan
600 E. Lafayette Boulevard
Detroit, MI  48226-2998

If the provider is still not satisfied with BCBSM’s response to the written complaint, the provider may send BCBSM a request for an informal conference within 60 days from receipt of BCBSM’s response.

Written complaints for utilization audits results should be mailed to:
Manager, Professional Utilization - Mail Code 510G
Blue Cross Blue Shield of Michigan
600 E. Lafayette Boulevard
Detroit, MI  48226-2998

Step 2 - Provider Managerial-Level Conference (MLC)
Within 30 days from BCBSM’s receipt of the written complaint, BCBSM will schedule a meeting (managerial-level conference or MLC) with the provider or, at the provider’s request, hold a telephone conference.  Within 10 days following the conference, BCBSM will send its proposed resolution to the dispute. 

Step 3 - Provider Independent Third-Party Determination
If the provider disagrees with BCBSM’s decision after the MLC, the provider may request an independent third-party determination for policy and non-policy related disputes.  Non-policy related disagreements include medical necessity determinations, pre-existing condition exclusions and audit decisions requiring repayment.  Policy-related disputes include relative value unit (RVU) assignments or conversion factors, experimental or investigational exclusions and audit methods.
The provider may select binding arbitration for non-policy related issues only.  If the provider selects this option, the provider waives the right to a review by the Director of the Department of Insurance and Financial Services as well as any judicial review.  The provider must submit the request for binding arbitration within 30 days of receipt of BCBSM’s MLC findings letter. 
A provider may select to have the dispute reviewed by DIFS.  If this option is selected, it waives the right to binding arbitration.  The provider must submit a request for a review and determination by DIFS within 120 days of receipt of BCBSM’s MLC findings letter.
A provider may only file for an independent third party determination AFTER having completed BCBSM’s internal complaint process or if BCBSM failed to schedule a MLC within 30 days of the request.

Requests for binding arbitration should be sent to:
Doctor Arbitration - Mail Code 1925
Blue Cross Blue Shield of Michigan
600 E. Lafayette Boulevard
Detroit, MI  48226-2998

Requests for a review and determination by DIFS should be addressed to:
Department of Insurance and Financial Services
Health Plans Division
P. O. Box 30220
Lansing, MI  48909-7720

Requests for a review and determination by DIFS should, include BCBSM’s audit number, the provider’s complete office address and telephone number and a statement indicating which of the prohibited actions BCBSM violated when it processed the claims or determined its audit findings. It is helpful if the request includes a copy of BCBSM’s MLC findings letters (if applicable) as well as a current e-mail address the provider uses on a regular basis.  DIFS may process all requests for a review and determination related to BCBSM’s audit determinations; however, DIFS will only process individual claims disputes for those BCBSM members with BCBSM underwritten coverage.  DIFS may not issue review and determinations with respect to individual claims disputes for members of self-funded groups filed by providers.  The patient, however, may have appeal rights.  Please refer to the complaint process section for BCBSM members for more information.

Provider Legal Counsel:
It is not necessary to retain an attorney to complete any phase of the BCBSM appeal process.  Most providers are not represented by counsel for claims disputes.  Many providers do, however, retain counsel when appealing audit determinations. Most providers are represented by counsel at the contested case hearing stage of the appeal process.  Providers can choose to go ahead without counsel at the contested case hearing but will be held to the same standards as an attorney at the hearing, including a reasonable knowledge of the Rules of Evidence and the laws and procedures that apply to contested case hearings.

Provider Maximum Fee Screen Disputes:
It is not the responsibility of DIFS to set BCBSM’s maximum fee screens.  If a provider believes that the services provided were more complex than usual and should have received additional consideration for the complexity of that particular procedure, then going through the appeal process might be beneficial.  If, however, the provider disputes the way BCBSM set it maximum fee screen for a particular procedure, then it may be more productive to start discussions with the provider’s particular specialty society as BCBSM typically meets regularly with provider specialty organizations to discuss these types of issues.

Non-Participating Providers and Billing:
As a non-participating provider, unless you agree to participate with BCBSM on a per-case basis for the services provided, you must collect your fees from the subscriber.  If a provider does not participate with BCBSM on a per-case basis, the provider should collect payment from the patient at the time the service is rendered.  For surgical procedures, you may choose to have the patient pre-pay for all or part of the procedure in advance. 
If BCBSM denies payment for the services provided to the patient by a non-participating provider, the patient must file a complaint with BCBSM.  The non-participating provider may also represent the patient in making such a complaint with BCBSM provided there is written authorization from the patient to do so.  Please refer to the complaint process section for BCBSM members for more information.

Provider De-participation:
Providers who have been de-participated by BCBSM cannot appeal this action with DIFS. Provider participation with BCBSM is by contractual agreement between the provider and BCBSM.  The terms of participation and BCBSM’s right to de-participate providers are delineated in that agreement. As such, de-participation is a matter of contract law and any such appeal would need to be filed in a court of law.